BYJU’S Faces Fresh Trouble
In a new challenge for the troubled ed-tech firm BYJU’S, 62 former employees have united and sent a notice threatening to initiate an insolvency and bankruptcy case against the company if their salary dues are not paid.
Canvas Legal, a Bengaluru-based law firm, has issued a demand notice of over INR 2.3 crore to BYJU’S on behalf of the employees. Ankur Tripathi, a partner at Canvas Legal, told Inc42, “We have sent a Section 8 notice to the ed-tech on behalf of these employees, making a claim that is cumulatively above INR 2.3 crore. We are expecting a reply from the ed-tech. We have given them 10 days as per the IBC (Insolvency And Bankruptcy Code). If the ed-tech fails to respond, we are all set to go to the NCLT (National Company Law Tribunal) with an insolvency petition.”
A copy of the notice, sent on July 4 and accessed by Inc42, stated, “The undersigned request you to unconditionally repay the unpaid operational debt (in default) in full within 10 days from the receipt of this letter, failing which we shall initiate the corporate insolvency resolution process in respect of M/s Think & Learn Pvt Ltd (BYJU’S parent).”
Approximately 1,500 former employees of BYJU’S have joined forces to demand their dues. However, not all could join in sending the legal notice due to certain monetary constraints, a source informed Inc42.
This development follows Karnataka Labour Minister Santosh Lad’s request for BYJU’S to settle the overdue salaries of at least 50% of its former employees “at the earliest.”
The Karnataka labour department has received numerous complaints from around 160-200 former BYJU’S employees, who allege that the edtech firm has not settled dues worth nearly INR 4.5 crore, even months after their termination.
Additionally, the NCLT has ordered BYJU’S to pay salaries to its employees, irrespective of whether it has access to the funds raised via its rights issue.
The Karnataka High Court has lifted the NCLT’s restriction on BYJU’S from undertaking a second rights issue, providing some relief to the cash-strapped startup.
Despite this, the ed-tech has yet to fully pay the salaries of its employees for February and March. This latest development adds to the growing list of challenges facing the embattled startup, including legal actions from some investors to stop the company’s rights issue and insolvency pleas from the Board of Control for Cricket in India (BCCI), OPPO, and others. Furthermore, the ed-tech is dealing with mounting losses, delays in filing financial statements, layoffs, allegations of hiding funds, and investigations by the Institute of Chartered Accountants of India (ICAI) and the Ministry of Corporate Affairs (MCA).
